Business Technology

Formula 1 study shows that innovation isn't always the best route to take

3 min read

24 August 2015

Researchers from the Fisher College of Business analysed data from 49 Formula 1 teams over the course of 30 years, and found that innovation can be overrated.

According to Jaideep Anand, co-author of a study published in the journal “Organization Science,” the Formula 1 teams that innovated the most weren’t always deemed as successful on the race track.

“We found that it wasn’t always good to be the aggressive innovator,” said Anand. “It proves that the conventional wisdom that companies need to embrace change is often wrong.”

The independent governing body for Formula 1 – the FIA – imposes changes to racing teams’ environments by releasing a new set of rules each year. However, Anand noted that radical innovations were often the least successful due to the times chosen by teams to apply them: when there were major changes in regulatory environment. 

This, he said, was something that business leaders did as well.

When the researchers analysed how much the teams innovated each year, and how well they performed on the race tracks, Anand claimed that certain findings stood out. For example, small amounts of innovation were generally good, but teams who changed too quickly tended to perform more poorly.

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“Teams sometimes believed the more the rules changed, the more they had to change along with them,” Anand said. “But we found that small, incremental improvements were often better than big changes.”

He said: “There’s a risk when you make some kinds of changes that you won’t be able to make the whole system work together again.” 

As part of the research, Anand included a case study from 2009, when the FIA approved the use of KERS technology. He claimed that several teams used the opportunity to add KERS to their cars, “believing the possibilities outweighed the potential costs”.

However, Anand stressed that at the end of the year, the two teams that did not use KERS were the ones who finished on top in the standings. This, he explained, was due to the device’s shortcomings. 

It added weight to the car and the driver had to learn how to use the technology correctly, Anand said.

He added: “The KERS example in Formula 1 shows the dangers of jumping too quickly at the chance to innovate. You don’t always get an advantage by moving first.”